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MarketScreener Homepage  >  Equities  >  Nyse  >  NextEra Energy    NEE


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NYSE says AEP, NextEra trades stand after crash at open

05/23/2013 | 05:25pm EST
A flag flutters in the wind outside the New York Stock Exchange

NEW YORK (Reuters) - All trades in American Electric Power Inc (>> American Electric Power Company, Inc.) and NextEra Energy Inc (>> NextEra Energy, Inc.) in a crash that happened in the first minute of trading on Thursday will stand, the New York Stock Exchange said, following the latest in a flurry of unexplained sharp drops in the market.

NEW YORK (Reuters) - All trades in American Electric Power Inc (>> American Electric Power Company, Inc.) and NextEra Energy Inc (>> NextEra Energy, Inc.) in a crash that happened in the first minute of trading on Thursday will stand, the New York Stock Exchange said, following the latest in a flurry of unexplained sharp drops in the market.

The stocks each dropped more than 50 percent in the first minute of trading, though ended just down slightly.

The share drops were the latest such incidents for the market since the May 6, 2010, "flash crash," a computer-driven trading glitch that caused a sudden afternoon tumble in the major U.S. indexes. Last week, the NYSE canceled trades in Anadarko Petroleum Corp (>> Anadarko Petroleum Corporation) after a blip in trading cut the market value of the company by 99 percent.

The latest event generated criticism from NextEra and others over what it means for investors.

"This is naturally a concern for all our shareholders and potential shareholders," said Moray Dewhurst, vice chairman and chief financial officer of NextEra Energy. "This type of market behavior is not what we would expect from a well-functioning and well-regulated exchange."

The NYSE said while all transactions in those shares in the first minute of trading will stand, all trades in AEP at or below $46.03 in that period, and all trades in NextEra at or below $76.19, will be marked with an "aberrant report indicator."

An aberrant report indicator is used to indicate the market believes that the trade price does not accurately reflect the prevailing market for the security, according to the U.S. Securities and Exchange Commission.

Shares of AEP dropped as much as 54 percent while NextEra sank 62 percent, both hitting their lowest price of the day right at the opening, but ended the session with small losses.

The Standard & Poor's utility index <.SPLRCU>, which contains both AEP and NextEra, led declines on the S&P 500. It ended down 0.8 percent, after having fallen as much as 8.1 percent earlier.

Individual stock moves of 10 percent or more in a five-minute period usually trigger a trading halt, based on SEC rules, but the rules do not apply to the first 15 minutes of trading or the last 30 minutes of a session. The exchanges are able to cancel trades in the event of irregular or erroneous activity.

To further reduce volatility, the SEC has approved a program called "limit up/limit down" on all major stock exchanges. But the program is just starting to be introduced on large-cap stocks.

Hundreds of trades occurred in AEP and NextEra shares in the first minute of trading, though many were on small volume, such as 100 or 200 shares. AEP's stock hit a low of $22.28 in the early action, but ended the day at $48.28, down just 0.6 percent. NextEra hit a low of $30.37 and closed at $78.22, down 1.2 percent.

After the NYSE ruling, AEP's intraday low stood at $46.07, while NextEra's low was at $76.50.

"Essentially you have a market that's unprotected for the first 15 minutes of the day and the last half hour," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. He noted, though, that the newer rules should help prevent the problem from happening in the future.

The limit up/limit down program aims to halt the trading of U.S.-listed stocks if they moved outside a recently traded price range.

"Limit up/limit down was effective April 8, (but) there is a further rollout period by ticker in alphabetical order," Credit Suisse analysts wrote in a recent research note. "So while a stock may be part of the S&P 500, it may not enter the pilot until a few weeks into the rollout."

(Reporting by Caroline Valetkevitch, additional reporting by Angela Moon; editing by James Dalgleish, Jeffrey Benkoe, Marguerita Choy and Leslie Adler)

By Caroline Valetkevitch

© Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN ELECTRIC POWER COMPANY, INC. 1.37% 82.08 Delayed Quote.-1.43%
DJ INDUSTRIAL -0.57% 30996.98 Delayed Quote.1.86%
NASDAQ 100 -0.29% 13366.396971 Delayed Quote.3.71%
NASDAQ COMP. 0.09% 13543.061633 Delayed Quote.4.99%
NEXTERA ENERGY 0.60% 84.21 Delayed Quote.9.15%
S&P 500 -0.30% 3841.47 Delayed Quote.2.27%
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Financials (USD)
Sales 2020 19 545 M - -
Net income 2020 3 947 M - -
Net Debt 2020 48 620 M - -
P/E ratio 2020 41,4x
Yield 2020 1,66%
Capitalization 165 B 165 B -
EV / Sales 2020 10,9x
EV / Sales 2021 10,3x
Nbr of Employees 14 800
Free-Float 99,8%
Duration : Period :
NextEra Energy Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends NEXTERA ENERGY
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 20
Average target price 83,14 $
Last Close Price 84,21 $
Spread / Highest target 15,2%
Spread / Average Target -1,27%
Spread / Lowest Target -19,2%
EPS Revisions
Managers and Directors
James L. Robo Chairman, President & Chief Executive Officer
Rebecca Jones Kujawa Chief Financial Officer & Executive Vice President
James Lawrence Camaren Independent Director
Sherry S. Barrat Lead Independent Director
Rudy Everett Schupp Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
NEXTERA ENERGY9.15%164 974
ENEL S.P.A.0.83%103 242
IBERDROLA, S.A.-0.34%86 962
ORSTED A/S0.80%86 171